European leaders are unlikely to agree on a loan for Ukraine using frozen Russian assets at the upcoming European Union summit, the Wall Street Journal reported, citing unnamed EU officials.
The European Commission said earlier that a decision on Ukraine's 2026-2027 financing will be made at the EU summit on December 18-19. According to the EC proposal, Ukraine could start receiving loan funds as early as April next year. However, the statement said that reaching an agreement was “far from guaranteed.”
Earlier, European Council President Antonio Costa suggested that the EU Council meeting could be extended until December 20 if a “positive conclusion” was not reached, Politico reported.
In early December, the European Commission approved two financing options for Ukraine, including a “potential reparations loan” for Ukraine, secured by Russian assets, and an alternative financing option for Ukraine - a loan from the EU budget (the “reserve fund”).
Belgium, Euroclear and the European Central Bank criticized the plan to use frozen Russian assets. Prime Minister Bart de Wever said he was considering taking legal action over the European Commission’s plan to use frozen Russian assets. He added that it would be difficult for the EC to find a legal and financial justification for using Russian assets in such a short time.
The Wall Street Journal writes that the European Union has options: raising new debt on financial markets or relying on individual member states. Both options would hit the coffers of European countries and Ukraine hard, and each would create new political difficulties for EU governments.
The alternative option - issuing debt guaranteed by the EU budget, which has already helped raise $54 billion - has several drawbacks, the article notes. For example, it would increase Ukraine's public debt, worsen its financial situation and require unanimous approval, something Hungarian Prime Minister Viktor Orban has said he would oppose.
EU ambassadors will work “extraordinarily“ this week and will hold three meetings in an attempt to persuade Belgium to agree to finance Ukraine using Russian assets, the Financial Times notes.
Moscow has threatened "serious consequences" if its foreign assets are seized, viewing any dealings with them as theft and warning of possible retaliation.